How do Polymarket work?
Polymarket is a decentralized prediction market built on the Polygon blockchain. Here's how it works at a high level: Market creation - Anyone can create a prediction market question, though Polymarket reviews and approves them.
Deposits - Users deposit USDC cryptocurrency into their Polymarket wallet via the Polygon network. Trading - Users buy or sell shares in outcomes of their choosing. Shares represent binary outcomes (YES or NO typically).
Price discovery - Market prices reflect collective trading activity and represent the perceived probability of each outcome. Liquidity providers - Market makers supply liquidity and earn fees from trades. Resolution - When the event occurs, Polymarket resolves markets based on factual outcomes.
Smart contracts - All trades execute automatically via Polygon blockchain smart contracts. Key features: Decentralized - Built on blockchain, no central authority controls outcomes. Transparent - All trades recorded on-chain and publicly viewable.
Global - Accessible in many countries (banned in 33). Crypto-native - Requires USDC and a crypto wallet. Real-time - Markets update continuously based on trading activity.